A business enterprise has two fundamental tasks:
- Create demand;
- Fulfil it.
All activities of an enterprise revolve around these two tasks.
Demand creation is about cultivating an idea, enrolling followers to that idea, and manifesting that idea in products or services that the followers would buy.
Demand fulfilment is about making available or delivering those products and services that the followers want to obtain.
Marketing and selling products and services traditionally are the activities of demand creation while the procurement, manufacture, and delivery of products and services are the basic elements of demand fulfilment.
Demand creation and fulfilment go hand in hand. The success of each depends on the other. Demand created and fulfilled results in added value to the business enterprise.
The tasks of demand creation and fulfilment are not necessarily limited to Sales, Marketing, and the Supply Chain. Finance, Human Resources, and Research & Development (R&D) play active roles as each provides the resources and strategic guidance to the enterprise’s management in the exercise of both tasks.
The manifestation of demand is the customer’s order or desire to purchase. This comes in many forms such as consumers choosing and paying for items at the supermarket, the purchase orders from a buyer to a vendor, or a signed contract for importation of merchandise.
There are some private companies that stress demand creation over fulfilment and there are others who focus more on fulfilment than creation. Entrepreneurs starting out would tend to prioritize demand creation while mature corporations may opt more for demand fulfilment.
Business firms that sell products that are in constantly high demand but in which the firm has limited resources and capabilities would probably put more emphasis into demand fulfilment. Cement companies, for instance, would be planning more on increasing capacity than on advertising especially when the construction economy is strong.
Consumer goods firms, on the other hand, would invest heavily on marketing and sales to spur demand while at the same time stress on delivery reliability. Cosmetic firms, for instance, would spend heavily on promotions and display counters at department stores to attract customers while at the same time stock inventories of multiple items to ensure outright availability.
Demand creation and fulfilment are not limited to enterprises with tangible products. Service companies also fundamentally create and fulfil demand. Insurance companies, for example, aggressively sell life and non-life coverages and fulfil the demand via signed policies.
In a world where business has become more complex due to issues such as corporate governance, climate change, disruptions, and social upheavals, we sometimes tend to lose focus. As much as demand creation and fulfilment are fundamental to our business, we can be distracted by what other people say are more important things to address.
Business is about reaping value for stakeholders. No matter how cynical it may seem, we manage our enterprises to translate ideas into the reality of demand.
“Great things in business are never done by one person. They’re done by a team of people”
-Steve Jobs
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